Utilizing Blockchain Technology to Enhance Halal Integrity: The Perspectives of Halal Certification Bodies

Halal supply chains have inherent problems or flaws, namely in traceability (the ability to examine and reproduce the exact path of a product in the supply chain) and in organising product recalls; transportation and warehousing (storage) downstream compliance with halal requirements; end-to-end chain integrity (unbroken chain) from source to point of consumer purchase; different halal systems and interpretations of different markets; and lack of IT integration with supply chain partners and halal certification bodies (HCB).

The integrity of halal supply chains is not only of great concern to the Muslim consumer, but also to brand owners in protecting their reputation as providers of halal products. Currently, there are insufficient technologies to address these halal supply chain risks. Consumers can be expected to ask not only for halal products, but also for guarantees that all the activities involved in the supply chain process are conducted in accordance with halal requirements

Brand owners face multiple challenges in establishing end-to-end halal supply chains and in halal issue management. To this end, leading Halal Certification Bodies (HCBs) set up a discussion group to achieve consensus on a way forward and to examine the potential role of the halal blockchain in resolving these issues, as well as the key parameters, and segregation and communication requirements of the blockchain.

Halal issues can be divided broadly into three areas: contamination, non-compliance and perception. This research shows that only cases involving contamination and non-compliance need to be reported to the HCB. Consensus has been achieved in the segregation of halal supply chains in terms of designated halal transport, storage and halal compliant terminals, for Muslim (majority) countries, whereas in non-Muslim (majority) countries greater leniency is possible. Effective segregation is only possible with effective communication, whereby the term ‘halal supply chain’ is encoded in freight documents, on freight labels and within the ICT system.

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